The Impact of Forced Displacement on Host Communities. a Review of the Empirical Literature in Economics

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The Impact of Forced Displacement on Host Communities. a Review of the Empirical Literature in Economics A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Verme, Paolo; Schuettler, Kirsten Working Paper The Impact of Forced Displacement on Host Communities. A Review of the Empirical Literature in Economics GLO Discussion Paper, No. 583 Provided in Cooperation with: Global Labor Organization (GLO) Suggested Citation: Verme, Paolo; Schuettler, Kirsten (2020) : The Impact of Forced Displacement on Host Communities. A Review of the Empirical Literature in Economics, GLO Discussion Paper, No. 583, Global Labor Organization (GLO), Essen This Version is available at: http://hdl.handle.net/10419/221747 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu The Impact of Forced Displacement on Host Communities A Review of the Empirical Literature in Economics Paolo Verme and Kirsten Schuettler1 Abstract The paper reviews the literature that estimated the impact of forced displacement on host communities. A comparative analysis of the empirical models used in 59 studies and a meta-analysis of 972 results collected from these studies are the main contributions of the paper. Coverage extends to 19 major forced displacement crises that occurred between 1922 and 2018, high, medium and low-income host countries and different types of forced migrants. Results refer to outcomes related to employment, wages, prices and household well-being. The meta-analysis finds that most results on employment and wages are non-significant. When significant, decreases in employment and wages are more likely to occur than increases with decreases strongly associated with the short-term, middle-income countries, females, young and informal workers. Food and rent prices tend to increase in the short-term. The probability of observing a decrease in household well-being among hosts is lower than 1 in 5. JEL: D12; E24; F22; F66; J08; J1; J2; J3; J4; J7; J8; N3; O15; P46; R2 Keywords: Refugees, Returnees, Expellees, Escapees, Internally Displaced Persons (IDPs), Forced Migration, Forced Displacement, Host Communities, Labor Markets, Wages, Prices, Employment, Unemployment, Well-being. 1 The World Bank. Corresponding author: Paolo Verme ([email protected]). This is a second updated and revised version of the paper originally published in the World Bank Policy Research Working Paper series (February 2019, No. 8727). The following authors whose papers are covered in the review have kindly checked on our representation of their results and provided comments: Yusuf Emre Akgündüz, Ibrahim Al Hawarin, Örn B. Bodvarsson, Sebastian Braun, Valentina Calderón-Mejía, David Card, Evren Ceritoglu, Michael Clemens, Emilio Depetris-Chauvin, Ali Fakih, Albrecht Glitz, Jennifer Hunt, Merle Kreibaum, Saul Lach, Joshua J. Lewer, Erik Makela, Hani Mansour, Jean-Francois Maystadt, Juan S. Morales, Elie Murard, Ayla Ogus Binatlı, Giovanni Peri, Sandra Rozo, Isabel Ruiz, Albert Saiz, Rafael Santos, Semih Tumen, Carlos Vargas-Silva, Mathis Wagner, and Jacky Wahba. Additional comments were received from Xavier Devictor, Christian Eigen-Zucchi, Harun Onder, Caglar Ozden, and William Wiseman at the World Bank and from participants who attended the following conferences: “Impacts of Refugees in Hosting Economies” held at the University of Southern California, Los Angeles, September 14-15, 2018; “Forced Displacement, Asylum Seekers and Refugees: Economics Aspects and Policy Issues” held at Queen Mary University in London, March 18-19, 2019; “3rd International Conference on Forced Displacement and Migration” held at the German Development Institute in Bonn, October 30-31, 2019; “2020 Research Conference on Forced Displacement. Improving and Scaling Evidence” held at the Joint Data Center on Forced Displacement in Copenhagen, January 16-18, 2020. The paper was also presented in Marseille, Amman and Beirut to local administrations hosting refugees and field workers working with refugees. We are grateful to the Centre for Mediterranean Integration, The German Marshall Fund and the World Bank country offices for organizing these events and to participants for useful insights that helped to contextualize and clarify some of our findings. This work is part of the program ``Building the Evidence on Protracted Forced Displacement: A Multi-Stakeholder Partnership''. The program is funded by UK aid from the United Kingdom's Department for International Development (DFID), it is managed by the World Bank Group (WBG) and was established in partnership with the United Nations High Commissioner for Refugees (UNHCR). The scope of the program is to expand the global knowledge on forced displacement by funding quality research and disseminating results for the use of practitioners and policy makers. This work does not necessarily reflect the views of DFID, the WBG or UNHCR. All remaining errors are responsibility of the authors. 1 1. Introduction The question of whether forced displacement2 is beneficial or detrimental to host communities3 has become a hotly debated issue in policy, political and media circles since the start of the Syrian refugee crisis in 2011 and the peak of the EU migration crisis in 2015. Economics has traditionally paid little attention to this phenomenon with only occasional studies of mostly historical interest until very recently. The first study of this kind dates back to 1990 (Card 1990) and between 1990 and 2011 an average of only one study per year reached publication. This changed after 2011 when the average number of studies per year started to increase very significantly. Thanks to these recent efforts, we now have a more solid body of evidence addressing this question: What is the impact of forced displacement on host communities? This paper provides a comprehensive review of the empirical literature in economics that addressed this question and a meta-analysis of the results emerged from this literature. Forced displacement (FD) is a different phenomenon from economic migration (EM), justifying a separate review.4 By definition, FD is less of a choice and less voluntary than EM, although there is ultimately always a choice behind most (but not all) migration decisions. FD is a decision that is taken quickly following a sudden shock as opposed to EM, which is more often a carefully planned move. Forced migrants typically carry some small savings with them but little else because of the sudden nature of the shock whereas economic migrants tend to carry savings and assets or transfer these in advance of the move. Economic migrants tend to rely on extended networks in the place of origin and destination and plan their move in accordance with these networks. Forced migrants tend to move to destinations based on proximity and security criteria rather than personal networks, although networks can occasionally play a role. EM is a regular phenomenon with increasing and decreasing trends whereas FM happens in sudden and unexpected bursts of population movements which can be massive in nature.5 Behavioral characteristics can be very different between economic and forced migrants. FD is therefore a rather different phenomenon from EM, calling for different types of theoretical and empirical instruments (Verme 2016, Ceriani and Verme 2018). The objective of this review is twofold. First, we wish to provide a review of the specific modeling and econometric challenges that this type of work entails for the benefit of social scientists who wish to work in this area. For this purpose, we provide a comparative analysis of models used across the 59 papers considered. Second, similarly to Card et al.’s (2010) review of active labor market policies, we provide a meta-analysis using a data set of 972 results extracted from this literature with the objective of summarizing results by selected outcome and provide initial leads on some of the factors that drive these outcomes. By doing so, we wish to bring some clarity to a very complex and controversial topic. 2 Under the term Forced Displacement (FD) we include refugees, returnees, expellees, escapees and Internally Displaced Persons (IDPs). These populations may have different characteristics, but they represent groups that have been subjected to FD due to some form of conflict, violence, persecution, human rights violations or high levels of insecurity or uncertainty resulting in a sudden and massive movement of people. We exclude episodes of Forced Migration (FM) due to environmental or other types of disasters and occasional or small episodes
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